On Elon Musk’s $45 billion payout: Oligarchy, capitalism and the fight for socialism

Tesla’s major shareholders have upheld a massive payout for CEO Elon Musk, valued at more than $45 billion. As a Delaware judge who had previously invalidated the payout noted, it is “the largest potential compensation opportunity ever observed in public markets by multiple orders of magnitude.”

Musk’s $45 billion is 1.2 million times the median income in the United States, which is currently at $37,500. Or, in other words, Musk’s payout is the equivalent of what is earned, before taxes, by 1.2 million workers in an entire year making the median income. Put another way, a worker making $15 an hour would have to work for 3 billion hours (375 million days, 1.5 million years) to equal $45 billion.

This gargantuan handout illustrates a number of critical aspects of American capitalism.

First, the massive sums accumulated by Musk are tied directly to the endless rise in the stock market, which is a mechanism for funneling wealth into the hands of the corporate and financial oligarchy. 

The $45 billion is in the form of stock options for Tesla, a “reward” for its increase in valuation from $50 billion in 2018 to more than $650 billion in 2020. This sum bears no relationship to any objective measure of the company’s value. It is the product of rampant speculation, fueled by a Federal Reserve policy of printing money—particularly as part of the ruling class response to the COVID-19 pandemic. 

The multi-trillion-dollar bailout of the rich during the pandemic (preceded by the bailouts of 2001 and 2008) was and is backed by both the Democrats and the Republicans, the two parties of the corporate and financial oligarchy. American billionaires now control more than $5.2 trillion, a $2.3 trillion increase from 2017.

Second, this massive growth in stock valuation must ultimately be extracted from the working class. The labor of workers is the source of all value and of the profits of the ruling class. After the CARES Act was passed in March 2020, the ruling elites launched a campaign to force workers back to work, leading to the excess deaths of more than 1.5 million people in the US, and more than 27 million globally.

Musk, unsurprisingly, was one of the foremost proponents of mass infection, even defying California state law to reopen Tesla plants, a criminal policy which state Democrats accepted. His own personal wealth was thus directly tied to the policy of mass infection, debilitation and death.

Third, as important as the accumulation of personal wealth is in its own right, it is secondary to and connected with the immense concentration of economic power in a small number of mega corporations. In the case of Musk, this now includes personal ownership of Twitter, which he brilliantly renamed X. He has utilized his control of the platform to promote far-right conspiracy theories and fascistic political organizations and individuals. 

Gigantic banks and equity firms like Vanguard (assets under management, $7.7 trillion) and BlackRock ($9.4 trillion) control vast swathes of the economy through their holdings. The sharp rise in the S&P 500 last year was driven largely by the soaring valuation of seven technology companies: Amazon, Apple, Alphabet, Meta, Microsoft, Nvidia, and … Tesla.

Fourth, as Marx noted, “Accumulation of wealth at one pole is at the same time accumulation of misery, agony of toil, slavery, ignorance, brutality, mental degradation, at the opposite pole.” The wealth of Musk and other oligarchs is directly related to the extreme social crisis for millions of workers and young people, in the US and throughout the world.

Officially, there are 582,500 homeless people in the United States, which is known to be a significant undercount. Workers are confronting soaring prices, forced to work multiple jobs just to get by. Social infrastructure, including public education and healthcare, is collapsing.

Finally, all of this is an expression of the basic realities of capitalism. Four years ago, I commented on a stupid remark made by Musk (whose net worth at that time was “only” $70 billion) about Marxism: “Das Kapital in a nutshell,” he wrote, is “Gib me dat for free.”

Indeed, I noted, capitalism is based on the exploitation of the working class, in which the capitalist accumulates “for free” the surplus value produced by millions of laborers, taking the profit for him or herself. “The product of the workers’ labor belongs not to the worker, but to the capitalist. In selling commodities on the market, the capitalist realizes surplus value that has been extracted in the form of profit.”

The statement concluded by noting: 

Some might argue that in his tweet on Marx’s Das Kapital, Musk did not intend to summarize the process of capitalist exploitation of the working class. Perhaps he was suggesting that in protesting their exploitation it is somehow the workers who want something for free?

Such a reading would make Musk look like an ignoramus and a blowhard, not to mention a racist. If workers interpret his tweet in this way, however, they will reply that they merely seek to establish a society in which the process of production is controlled democratically, and in which the product of human labor is distributed on the basis of equality and human need, not the accumulation of vast wealth by the few. It is the expropriators, they will say, who must be expropriated, with Musk among the first in line.

The necessity for the expropriation of the expropriators, for the abolition of capitalism and its replacement with socialism, in the US and throughout the world, has only become more pressing over the past four years. The oligarchs, engorged on wealth, have normalized mass death in the pandemic, normalized genocide in Gaza, and are driving humanity to the abyss of nuclear war.

The massive accumulation of wealth in the hands of the oligarchy, moreover, is incompatible with democratic forms of rule. This is the essential objective factor driving the ruling elites toward dictatorship and authoritarianism.

The same capitalist contradictions provide the objective basis for social revolution, in the form of a working class, united in the process of production, integrated across all national barriers, and whose interests collide with a system that produces the likes of Musk. The basic and urgent task is the development within the working class of a socialist political leadership, conscious of its aims.

This is the basic aim of the Socialist Equality Party and our election campaign. Get involved.